German transport operator Deutsche Bahn is close to agreeing a £1.6 billion takeover of UK bus and trains firm Arriva, it was reported today.

Deutsche Bahn’s board is meeting this week to approve the bid with an announcement expected in the next two weeks, the Sunday Times reported.

The state-owned German company – which already operates UK services such as the Chiltern Railways route between London and Birmingham Snow Hill – first confirmed interest in Arriva last month.

The company has been working on detailed due diligence for the past month and could make an offer of between 750p and 775p a share, according to the report.

The acquisition of Arriva, which is the UK’s third biggest transport firm, would create a European travel giant.

Arriva also attracted takeover interest from France’s SNCF earlier this year as European operators look to consolidate to take advantage of deregulated transport markets.

Arriva runs two rail franchises in the UK including CrossCountry, which covers 1,400 miles and calls at more than 100 stations between Aberdeen and Penzance, Bournemouth and Manchester and Cardiff and Stansted.

It also runs bus services in major cities such as Liverpool, Leeds, Leicester, Glasgow and Newcastle as well as operating services in 12 European countries.

Alongside Chiltern Railways, Deutsche Bahn is involved in the running of the open access operator Wrexham, Shropshire and Marylebone Railway and is joint operator of the London Overground service.

It also bought the EWS freight company – which runs the Royal Train – in 2007, rebranding it DB Schenker.

The company, which was founded in 1994 as a successor to the German state railway, has around 240,000 employees – of which around three-quarters are based in Germany – and operates in 150 countries.

Arriva declined to comment and Deutsche Bahn was unavailable for comment.

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